This is a dangerous development. Surely sovereignty and democratic governance are red lines in this saga. European history suggests that any formal encroachment is these areas has potentially catastrophic results.

Maybe the Greeks' approach to their debt problem is the wrong way to go about it. Instead of humbly asking for handouts like cap-in-hand beggars, they should insist that the rest of Europe, and for that matter the West in general, should at last recognize the great debt they owe them in return for Greece providing much of the foundation upon which rests Western civilization. Turn the tables, and ask the West to develop a credible plan to finally pay up past due royalties.

There are precedents for this: The aboriginal land and compensation claims in both North America and Australia to satisfy pre-colonial claims. Why could this principle not be extended to more intangible, cultural, claims of the past?

Considering the elapsed time just between the Renaissance, when the wisdom of Ancient Greece experienced a revival in Europe again, to the present, the compound interest alone on the accumulated royalties the West owes Greece would make what Greeks owe to their creditors look like a mere trifle.

And now we owe the Italians for all the words of Latin origin...let me count that, say YOU...used about 200 words, multiplied by (let's be fair) at least a 1000pounds... I think you now owe the Italian govt. near the neighborhood of 200.000 quid!

Sorry I forgot Rome's contribution, ReachFreedom, although it too borrowed a lot from Greece. Its successors are also in need of some help, so let's include them in my plea. There should be equal opportunity for all. :)

Thanks but no. We do not want our illustrious ancestors getting is out of every bit of trouble we manage to get ourselves it. It is time to face the music and work out our own problems. If our European friends want to help us out because helping is, for one reason or another, in their own interest, that is nice, but we must together make sure their help is effective. Greece needs money to stay afloat, needs time to reform, but more an anything else it needs to replace its ineffectual and corrupt political class with people who are honestly committed to reform.

Well, if you put it that way ReachFreedom, then the Jews would also be owners of the franchise of modern monotheism, but we are getting off topic here...

I guess if our tongue-in-cheek discussion proves anything, it must be that we are all in this together: Yes, Greece has a problem and the ripples of a messy default could spread far and wide.

Greece appears to be fair game now to be ridiculed and blamed for all its present financial woes, but isn't this somewhat akin to blaming the bursting of the US housing bubble and the subsequent financial crisis on those sucked into piling up mortgage debt they could not really service, let alone ever hope to repay from the start? Should we now cast the bankers in the role of innocent and hapless victims?

I believe Greece's lenders and Brussels have a lot to answer for this mess. Words like reckless greed, naivety or sheer incompetence come to mind. Unfortunately their actions, or shall I say inaction when action was warranted, imperils now a lot more than Greece alone.

Greece should never have been admitted to the EU and have proven that they should not be in the Eurozone. Instead of waiting for their inevitable secession [when they have milked the EU for every last Euro] they should be expelled, after taking precautions to limit collateral damage.

You are right. The european Union has not been consequent enough in the past. That's why it has to react much stricter when a member state offends the common rules and laws. This new behaviour of the EU has to start immediately in the rescue negotiations with Greece and the violations against the rule of law in Hungary. The new accession countries for the EU and the euro have to be checked much more accurately in the future as well. Not to forget: The EU-institutions also have to be strengthened to be able to prevent offences against the common rules of bigger member states like France, Italy and Germany as well.

US/UK are trying to slowdown the decline of USD supremacy and City iinfluence
by a currency war against the Euro by using hedgfunds and investment banks
attacking Euro t-bonds with short selling and CDS speculation creating an
erosion of trust and confidence in institutional investors market decision in
2009. at the same time anglo media and establishments started their campaign
against Euro zone's inherent imbalances blaming Germany being the root cause
of that mess not taking crucial counter measures to solve that crisis en
plus..

anglos do not distract from your own system default! tell your people the
truth why you became weak economically because of giving up your
manufacturing base in favour of wallstreet and city business you have created
the root cause of global trade imbalances..

anglos do not camouflage you have poisoned the world with the outcomes of
your voodoo economics - an economy of growth fueled by no
underlying value creation based on credit and speculation bubbles - triggering
the debt crisis southern europe is suffering from!

anglos show some solidarity via IMF and EU contributions instead of calling
them PIGS and fourth Reich agitating your fleed of banksters against them by blocking
politically any financial market regulations which would help to extinct its
parasitic and unsocial behaviour against the value creating economies and the
working people of the world..buddies your time is up unless you change..

Why is Greece in Europe anyway? And please do not give me that excuse of 'foundation of European culture' ! These guys are like us, and the Turks, and the Persians and the guys in Albania (Alexanders home). Oh ! I get it !! You mean you want a white Christian club, right? Well, then say so. What are you afraid of, but your fears.

"The legal mess of broken contracts it would create would take years to sort out. "

Exactly. And what are bonds but repayment contracts? If the Greek government retrofits collective-action clauses onto their domestic-law bonds, the legality of it will certainly be challenged. Greece is bound by principles set forth by EU treaties. European courts will be loath to degrade the credibility of the entire European legal system just to grant Greece a get-out-of-jail card.

Even if the legality of the retroactive CAC is upheld, the voting itself can be challenged on the ground of corruption. The game is clearly rigged against foreign private creditors. Greek banks and pension funds will be recapitalized by the government afterward. That constitutes illegal inducement, it can be argued.

The legal proceeding can go on for a decade or more. The uncertainty means that Greece will be completely shut out of the international financial market. Moreover, the vulnerability of Greek central bank assets to attachment by creditors will negatively impact trade and foreign investment.

True. However if past experience is anything to go by, given the depth of the crisis and the fact that the severity thereof has been amply certified by EU and international institutions, Greece will certainly claim that full repayment of bonds was impossible without destituting the nation to a degree that would adversely affect each and everyone of its citizens, which made the retroactive CAC necessary -- in effect a classic defense of "Salus Populi Suprema Lex". Since Greece is a democracy and corruption cannot be claimed without proof of both existence and extent, my bet would be that the creditors would walk away empty handed.

If past experience is anything to go by, a EU court will strike down any defense resting upon the notion of sovereign rights of a member stats. A very viable path for creditors, I think, is to argue that they're made to suffer extraordinary losses primarily because (a) the Greek government failed to abide by the Growth and Stability Pact and (b) the Greek government failed to implement reforms demanded by the Troika. And since nemo ex suo delicto meliorem suam condicionem facere potest, Greece should not be allowed to discharge its obligations.

And the Greek government will simply reply that it did in no way benefit from its actions, given the enormous crisis it found itself in, and that a decision against it would in effect be criminalizing the act of governing itself, as no one could prove that the a) and b) failures were a result of wilful decisions and not the result of errors, incompetence or political and economic conditions beyond its control. Who for example could say whether the picture would have changed in so short a time even had reforms been implemented, or that it was to precisely the inane demands for super austerity that exacerbated the crisis? I very much doubt any court would so sweepingly encroach on the authority of the executive branch; however I am not a lawyer so I am perfectly willing to entertain the notion that I am completely wrong on this one. One thing would bug me even then though: let us say a court took such a decision. It would probably mean default and exit from the EU for Greece, and then how would the court enforce it?

There's no precedent for a case like this. I believe that EU judges can be persuaded by a line of reasoning that posit that the problem is national governments and the answer is EU institutions. Given the opportunity to enhance its own power, the EU judiciary will probably take it. Greece presents the perfect case for curtailing sovereign rights. It can be easily established that the Greek government systematically falsified the country's economic statistics; that its politicians engage in vote-buying through the government payroll; that the richest Greeks pay little taxes and have parked billions of euro in Swiss banks.

Even Greece were to leave the EU, it cannot escape a judgement against it. Creditors can go after the assets of the Greek central bank held abroad, for example. State-owned companies can also be targeted.

Whether or not what you state here is true. The comment "Greece presents the perfect case for curtailing sovereign rights." would lead down a path that the EU would(and should) not want to go. If it does, even for the best on intentions, the truism is "The Road to Hell is Paved with Good Intentions".
This situation has exposed the horrifying democratic deficit at the heart of the EU. This has to altered if the EU is to survive. How it deals with the Greek disaster will inform all nations within and without if the EU is worth having in existence.

Why does Europe keep pouring money into the bottomless pit that is Greece? They need to act decisively to force a substantial haircut on creditors (it is clear the country is bankrupt and the sooner the lenders take their losses, the better) and a Greek withdrawal (they need the drachma to restore competitiveness)from the Eurozone. There will be short term volatility in the markets but surely these possibilities have been anticipated and priced in already. In the long run, Greece will and the Eurozone will both benefit.

If Greece defaults, it won't just depart the euro zone. There's a good chance that the country will crash out of the European Union altogether. Reintroduction of local currency would require capital control, which violates one of the essential freedoms of the EU. Chaos and hardship will produce economic refugees to other member states, leading possibly to the suspension of the freedom of movement. Recall, for instance, the deportation of gypsies by France or British tabloids depicting Poles as spongers of the UK welfare system. With their industries imploding, the Greek government will find it hard to abide by EU's competition rules as well.

Agreed there will be difficult short-term consequences. Greeks may need to institute capital controls till their new currency stabilizes but Europe can allow this temporarily without kicking them out of the EU altogether. The crisis is still manageable now but if Europe does not act decisively, the contagion will spread to Italy and the situation will no longer be in anyone's control.

At the very beginning Greece should have been given the chance to quit the Euro and to declare: We are sorry. We are insolvent. Period.

So please lenders, take a seat and let us discuss how Greece is able to get back on track and pay back the rest of debts, after the "haircut" to its lenders.

At the end Greece would have been better off. But who cares?
Why does no one question these issues?

Behind the scene, there must be forces which would not like Greece to be insolvent because some (rich and bankers) want their money back.

And there you go.´To make a long story short:
This is the only reason why Greece is being helped.

And for some American cooperates that sell insurances (CDS) it would have been a expensive adventure. And there are just a few countries which are able to boil-out. And Germany is one them, next to China because the latters hold assets (Japan is the third one) and rest of the world debts.

All the doing was and is never meant to rescue anything but the money of the rich.
Therefore all the action undertaken should not make you believe that anyone cares about the working class, a country, a currency......

The banks that have sold CDS are foremost German, Italian and French. That's why they agree to a "voluntary" hair cut. The ones who own the CDS are foremost hedgefunds and they won't agree to anything.

In response to your answer, which I appreciate, I do care of the nationality of the bank(s).
The bottom line is: There was just one country so solvent to boil-out. And that is Germany. Period.

With a haircut, Greece would be better off. Thats all. And without an haircut, Greece would never ever be able to pay its debts back. This fact has been on the table since the very beginning of the crises. And it was soooo obvious but denied.

Germany has to pay only for what it has to pay. Period. But you have to do that and you still haven't.

"Maybe you forgot something about - be liable to your action taken."

Germany has forgoten to do that when it comes to Greece for more than 60 years now. So this goes back to you as a boomerang.

Greece would have been a different country if we did have that money many years ago.

But then, how could Germany sell us all of its expensive industrial products by lending us money to do so as well, making both industrial and interest profits at the same time? And they managed that by using our corrupted politicians. The Siemens scandal is such an example or the one with the faulty submarines that Germany refused to take up and MADE us receive them. Although it has now came up that the Germans bribbed our ex Defense Minister so that they can do what they wanted. It is being investigated but everything leads to that.

Did you know that Hochtief who owns our national airport in Athens has paid almost nothing in taxes and is currently into courts with the state? We are talking about more than 100 millions in taxes!!! And that is only one German company of the many we have here in Greece.

Don't be a fool. If you are a Greek and you seriously believe that everything in Greece would be fine if you had just got enough money early enough, then you are still in the denial phase (the phase that comes before the ugly wake up phase). Greece needs very huge changes in many fields to catch up to European standards ... politically first of all, and your economy is extremely uncompetitive, your media are not independent but at the payroll of politicians, your judicature is a disaster, the rest of the public sector as well and so on. Had their been a hair cut two years ago, be sure that your country would not even have tried to change, not even a little bit! So this mess would have just returned again a few years later, but it would be even worse than today. So consider the current European pressure for reforms as a chance for your country to catch up to European standards and as your personal luck!!!

And regarding the claim of open "WW2 indemnities": You own or owe what valid laws and contracts say you own or owe, not what you personally believe or what your Greek newspapers tell you in a populist attempt to increase their sales. In the end of the day, lawyers will decide what the Germans owe you or not. Unfortunatelly, not even politicians as idiotic as the Greek ones would not try to get that money back if there was a valid claim.

You are funny. It is impossible to make business in Greece without bribes, they have adopted to your country's standards. If there was corruption or unpaid taxes, I guess you should sue them. Fact is that the Greek state still owes a lot of money not only to German companies but to companies all over the world without any prospect of ever getting their money back. Or why do you think nobody is interested in investing in Greece??

At this point I will state that I have a better knowledge of my country's history than foreign people. And I'm not leaving in denial, I know that things have to change massively.

You're mostly right on everything except of some points. The media are on the payroll of the local elite, who in turn control the politicians. But that is the same in every country anyway.

The changes should have taken place not 2 years ago, but 3 decades ago and along with the money that Germany owes us things would have been better. They do owe us money no matter what you say since many of their economists have publicly admitted so. But as you know, when you're David it isn't that easy to have a fight with Goliath.

There is no thing such as personal luck nor good intentions from the rest of the EU. All they care about is not to triger the CDS and haircut their bonds. They only care about getting their money back and the changes they're promoting intend doing that and only that.

In the meantime, they intend to help our economy become "competitive" by lowering the salaries so that, in the future and after we default, their companies will buy most of our companies and control the local market. In other words,they are ensuring from now that they will enjoy high profit margins. Simple as that. Nowadays you don't need to evade a country in order to control as you had to in the past.

Well, as you know this is a standard colonial policy of the stronger countries. That way they employ a local elite who acts as their reps in the country thus allowing them to hold a small fraction of the profits that are being generated by the manipulation of the local resources. At the same time this elite stores their money in the offshore havens controlled by the strong countries. In other words the big countries have deposits in their banksRead more on what John Perkins said in his book "Confessions of a Economic Hitman". It's the same policy they followed in latin America and the Middle East.

Oh lord. You still have a lot to learn and this attitude won't help you. It is probably simply the best that Greece defaults, leaves the EZ and you continue with your live and conspiracies as always. "Simple as that"

"The media are on the payroll of the local elite, who in turn control the politicians. But that is the same in every country anyway." That's a joke, right?

1)I agree, but no foreigner will get any money for their bonds. They have the CDS for that.

2)Of course it's a joke, that why we all knew from the beginning that the world in Iraq was a hoax in the first place. dailymail.co.uk/news/article-2020625/Iraq-inquiry-Tony-Blair-held-account-Chilcot-report-war.html. This is the definition of independent journalism in my book.

My "friend" but your are not a friend to me.
You just are a selfish, egocentric one who seeks for lame excuses.

This should be made clear at this certain point. Take a look at your "peaceful" aggressions
and think what does Greece owe the ancient world, because Greece (e.g. Alexander the Great) stolen so much from these countries as it destroyed and occupied them.

To make a long story short:
Greece is just not able to exist without external help.
And much more critical, it will never be able to exist without external help.http://www.euo.dk/euo_en/spsv/all/79/

And even if Greece had had all that gold it would have spent it already and would therefore be in debts today. This is just what history tells and it says: Never ever trust Greece because you were always cheated on.

Just stop foolish yourself by blaming others for your country's decisions.
To take out loans, or any kinds of debts - were simply and only YOUR personal decisions.
There is no one else to be blamed than Greece and the people itself.

For me the point is reached, at which, I would appreciate to stop discussing matters with you. Thank you very much for your time and dedication you shown.

You say "...Europe’s governments have made little progress on building a “firewall” around countries like Italy and Spain." And then go on to advocate harsh terms on Greece's private sector creditors.

These creditors have insurance through CDS's (we'll see how much that insurance is really worth) and would rather see a default than a drastic 'voluntary' haircut. They have the whip hand.

Realize that whatever is done with respect to Greek debt is a template for the debt resolution for the remaining PIGS. The market will have no other credible signal. So this template for debt resolution will IMMEDIATELY feed into the bond markets.

Remember your quote about having no firewall for the remaining PIGS? The course of action you advocate will insure the outcome you most fear. "The ensuing chaos and contagion could fell the single currency..."

I think the EU has let Greece do what it wants for too long!
It has lied about every little thing about its economy, plays the EU against Turkey (though some/most members don't seem to mind that), and even is against its tiny neighbor - Macedonia joining the EU (although the International Tribunal in the Hague ruled that Greece violates International Law).

I think it's time we call it "quits".

Sort-out your own problems, without making problems for all others.
Let's face it: Greece is deceiving all of the EU. And it does so, just because the EU bureaucracy is letting it do so!

Who's or what's FIROM? This acronymic keeps popping up whenever there is a Greece article. Anyone care to explain what it means? I read it in Greece-related articles but noone has explained what the hell it means, this word

Did you say:
"...the comment you make for FYROM is pointless. You are either from FYROM or not familiar with Balkan history"?

You do not seem to know Greek history, I'd say.
The fact is that Greece often has lived beyond its means and ALWAYS is counting on Europe to solve their mess with no-Greek-money. Balkan history also will tell you that Greece was once a part of Turkey...is that why you hate the Turks as much?

And as for Macedonia (not FYROM, But MACEDONIA): Doesn't matter what Greek history book you reed, or whether you believe that Macedonia is "this or that": You were sentenced by the High Court of International Justice, for not respecting the rule of international law!

Now, keeping in mind that Greece also lied about its financial performance, just to get into the Eurozone, am I right to say that: Greece thinks that it is above any law?

Modern Greek history is self-serving revisionism. Ancient Greeks did not consider Macedonians to be Greek, and modern Greeks are actually more slavic and Turkish than Greek. So then, those who lie about their past, about their finances and about their intentions are obviously totally untrustworthy.

Greece should never have been admitted to the EU [but are a 5th column for the Serbs and Russians] and have proven that they should not be in the Eurozone. Instead of waiting for their inevitable secession [when they have milked the EU for every last Euro] they should be expelled, after taking precautions to limit collateral damage.

You sound very nationalistic. If it was up to the Greeks there would have been troops marching into Macedonia to make it change its name by force. They just wished they could do that. But thank God there is the international community with its multitude of bodies, such as the UN and thank God there is NATO, without all of which we would see conflict around the world for matters such as country names, or for a verbal offence or for one guy spitting out of the window while driving through another country...

Ouch! You said " beware gifts". I do not want to go into inane discussions about whether or not the ancient Macedonians were considered Greeks or not, or about whether the Greeks are Slavic and / or Turkish, these are childish notions for nationalists to play with. However, when you have learned more Greek and can read for yourself the ancient inscriptions, you are welcome to visit Greek Macedonia and reach your own conclusions about what the ancient Macedonians were.

There is no point to search for true blood Greeks, or true blood French or Italians or whatever. This is silly.
The fact is this:
Macedonia is an area. It's the North part of Greece, and the South of Bulgaria and FYROM. Modern Greeks and modern slavic nation wanted this land (check on Balkanian wars for more information). The fact we were always fighting to each other for this area allowed the West Europeans to mess with Balkanian nation and turn our countries to the wonderful places you know.
The problem is that by allowing a country to be named us "Macedonia" is like admiting that it has the main right of the whole area of Macedonia. Unfortunately, among the nations in Balkania, some consider that there are still issues of our countries borders.
To sum up, by allowing a country to be named "Macedonia", in a way you allow it to clame the whole area.

Your comments display a superficial familiarity with Greek history; it also looks like you have chanced upon some of our idiot nationalists at ome point and have drawn general conclusions abut us and how we view our history which do not correspond to the truth. I am sorry your experience of Greece has been so negative.

Man, take my advice and leave the Greece - "Macedonia" thing alone. It has been discussed ad nauseum in the Economist comments too often in the past, inevitably degenerating into the equivalent of a yelling match between football hooligans. It won't change until both sides admit that some of their cherished beliefs about their own history are in fact fairy tales.

Instead of irrational irredentist notions and arrogance, the Greek government should have agreed to their being called Northern Macedonia. This, with or without disclaimer of expansionist intentions should have been enough.

Greeks always make the same kind of mistake. Enosis [Greek arrogance] brought on the Turkish reoccupation of Cyprus. More Greek arrogance in arresting the EU agent and charging him with Crimes against the greek nation could very well bring on the wrath Teutons.

"To sum up, by allowing a country to be named "Macedonia", in a way you allow it to clame the whole area."

You mean in the same way that Greece claims Ionia from Turkey? Does Greece claim that being Hellas gives them title to all former Hellenic lands from Syria to Magna Graecia [Southern Italy]?

This irridentism is of your own making. Shall you surrender Southern Epirus to the rightful owners, Northern Epirus [Albania] or to Illyria [Croatia]? If Greece chooses to keep history alive by making absurd demands based on questionable history, then Greece has no right to deny the same kind of claims by others. It would be better to "let the dead past bury its dead" and make peace with the modern world. Pride goeth before the fall," and Greece exudes enough pride to produce a really big fall.

I love my country as everybody else. Violence is no solution to any problems. I'm against it. But if you hit me, I have to hit back. That's the way it goes and that's what everyone else does as well.

You should read more on how fair the international community is being in other areas of the world. Try Africa or Latin America for starters...What I'm implying is that you think they actually realise that you are right about your problem when in reality all they're doing is helping you a bit because right now it's in their interest to do so. As soon as that changes, you'll see their other face soon enough.

If you think it is just the name you're wrong. They think that Salonica is their capital. That is way more than just a name conflict. It's as if the French told you that Bavaria is French and they're capitol is Munchen.

Their ex president that died recently had stated in the past that first is the issue of the name, and then there is the issue of the land. In other words, after they manage to declare themselves officially as macedonia, then they will want to inhabit and the actually area which guess what its located in Greece.

They are preparing that by claiming that there is a macedonian minority in macedonia in greece and that our state does not recognise their rights. Next step would be what happened in Kossovo with the albanians. They will want to declare indpendency and connect with their state. That's what they are actually trying to do. That is a lot more than just a name conflict, don't you think? And certainly that has nothing to do with the colonial policies of stronger countries.

I'm afraid you live in a parallel universe. The Greek foreign policy has been the peaceful one in balkans for decades now. We claim nothing from noone while on the other hand ALL of our neighbours, with the exception of Italy, constantly claim parts of our land.

The reason behind that is that the more peaceful you are the more disrespectful people get on you. They have to fear you in order to respect you. That's the problem of our foreign policy.

As far as you people are concerned, you have so much hate about us and that is pretty clear in your post. The poison is all over my screen. Be happy with what you have and try to make out of it.

"Cyprus was divided based upon the anglo-saxon policy of divide and rule. So they had Turkey do all the hard work and they now cherish the fruits."

What absolute rubbish. But then again, they do not teach history in Greek schools, they teach mythology to create good nationalist histories. By the way since when was 'divide and rule' an 'anglo-saxon' policy?

But these are the eternal Greeks - arrogant, ignorant, nationalist, ahistorical, with an over-inflated sense of their own importance and leaving in an alternative universe all of their own. By the way, it is the very fact that you are Greek which makes you less capable of discussing the history of your country, because that historical knowledge is not based on unbiased critical observation, but is based instead on decades of nationalist brainwashing through government education. This is not just a Greek problem of course, it is typical that it is the citizens of a country itself that have the most inaccurate view of its history, and this is even more so in countries where nationalism is still strong.

This policy has been implied to all the colonies of the long gone, yet still alive in a different variant, British empire. But if you're British, I suppose historical brainwashing applies to you as well.

The abettors are usually the ones who profit in the long run. So check out who gains the most from the current situation in Cyprus and there you have it.

I see. So we should bow to your supremacy and exist in your universe of obedience. That's one of our main attributes as a nation. We will not obey that easily as others whether you like or not. And we certainly aren't surrender monkeys either.

You're right about historical brainwashing from each nation's government. But I know the modern history from my parents and my family who have actually lived in that era, 40s and so on, so no govermental brainwashing can be applied there.

By the way, unbiased critical observation, especially in the field of history since it involves geostratigical policies and the exploitation of local resources, is as rare as the sightings of the Loch Ness monster.

For the record, I'm a patriot not a nationalist and certainly not a fascist. Loving your country and being proud for her is my right as everyone else's as well.

It's time for Europe to pay its debts. It is not a Greek problem, as much as we'd like to believe so. It's mainly a European problem, don't blame the one taking the money, blame the one giving the money (if I'm not mistaken this principle is also applied in law when it comes to bribe).

Europe, as a whole, is to blame right now for this mess. A failed financial system - Europe solved it pumping even larger amounts in Greece.

Greece doesn't find all right to accept an otherwise secular state, such as Macedonia? Europe says it's ok, takes no step (despite the decision of the International Court of Justice) and leaves it as it is.

I really wonder if the EU would take the same stance, if, say, Russia would dare to claim one of the former republics?

There is little doubt this is a watershed moment, what to do, let Greece sink, or bail them out kicking the can down the road hoping for what? This we know, the next day will come, and sooner rather than later they in EU & the likes of IMF will have more experience in such matters. This will not be the first and last turning point our so called world financial experts must control, so they best give it their very best shot. The blame game is not an option!

"Greece’s European rescuers should offer the country a clear choice. If it embraces tough reforms, it will get fresh funds and a gradual reduction of its official debts."

Considering that Greece for two years did not keep one single of its many promises regarding reforms, fresh funding should have cut off one year ago. Would have saved the taxpayers of the otner contries tons of money (which was anyway just transfered to the finance industry all over the world) and the inevitable Greek default would by now already be on the upward trajectory alreadey.

You say that we should default; we since I'm Greek. No problem! But hey, default means not paying your creditors. So foreigners will get 0 euros for the bonds they own. No settlement for the years ahead as you say. We will only pay the bonds that Greeks own. But don't worry. You will get your money back anyway. That's why we have the CDS, right? But wait, your institutions will have to pay for that. It won't matter anyway since they have already made trillions with all the speculations going on for two years now, right? In the end, you will have gotten your precious money back, we will owe you nothing and everyone will be happy. And don't tell me that this unethical. The colonial policies imposted on weak countries by the strong countries so that they can ensure that their citizens' lifestyle does not change IS unethical. The big colonial empires of the past want to ensure their empire status without being empires anymore. This is what it's all about really.

Then, since we are the primary reason for the issues that euro faces, we will leave the euro and go back to drachma. No more being the scapegoats for the big EU boys who cook their books. At the same time though, we will enforce new laws not allowing foreigners or Greeks representing foreigners to buy any form of asset using their stronger currency. Because that is the primary reason everyone does not want default here. People think that foreigners will buy everything for pennies. Already foreign banks are advising their clients to buy assets here by getting a loan from a Greek bank so that when we default they will use the undervalued drachma to pay half of what they should have payed in the first place. No no no.

And the banks won't get away with it easily too. The IMF and EU want us to lend another 30 billion, reaching more than 100 billion in total in just 3 years, to the banks but the state will get common shares without vote!!!!!!! We, the taxpayers that are lazy and rebels as you people think but work much harder than all Europeans according to Eurostat while being underpayed in contrast to the big EU boys again according to Eurostat, pay for the losses of a handful of bankers, while they still leave in luxury, and we get nothing in return. No, the banks will become part of the state and provide the people with a safe net for their money.They will also be used to finance the future growth of the economy. Ohh, and the people will get their houses back. The houses or assets that the banks got from them by imposing interests that should be considered illegal.

Now, I have news for you. We have the land to feed ourselves. We have one the best lands in Europe when it comes to that. We have everything. It's just that supermarkets and the middlemen will not like this scenario since they are used to importing food from third countries and selling it in high prices thus making huge profits. Well, they'll soon become a part of history. Most people here have land that they can cultivate and we can exchange food between us as well. In the villages this is the general rule. No need for food imports then. Hey, look at that we're still alive and kicking! They only thing we have to do is work on that since our farmers where transformed to people who stay in pubs all day long waiting for the EU money to come.

Then, since we will have a competitive, ahh at last competition!, currency, we will use our excellent landscape and climate for tourism. Also, we will export to the greedy northern middlemen our products and still make huge profit allowing us to leave in prosperity and not austerity like now.

Ohh, I forgot. Instead of giving the EU our underground wealth, like oil or natural gas that Germany craves for and is trying to take away from us using this crisis because in a decade from now they will be fully dependable to Russia, we will give it to the Russians instead. And we should not forget that Germany wants our electricity emanating from solar energy as well. They will have to get it from somewhere else or simply pay double the price. And, of course of course, Germany will have to pay at the same time all the money they owe us from the WW2 and still refuse to pay. No solar energy without that.

We will then rent the rest of our ports to the Chinese so that they can flood the EU with their products while we will collect taxes, lessen our unemployemnt rate and sign privileged contracts allowing us to export our products with unique conditions to China.

We will then sign contracts in the defense and security field with Israel, one of the leaders in these fields, in exchange of oil and gas or uranium, gold etc. Give some to the americans as well but nothing to the European "allies". That way we will be protected by our "allies", like Cyprus did recently and Turkey can't do a thing about it.

And we can easily assist all the unfortunate arabs, pakistans etc to reach their final destination. In other words all the northern countries unless they change their colonial policy in those territories, which creates those financial immigrants in the first place, or actually pay us so that we can provide the service of "protecting our borders" in a better way. The Turks can join us in that one as well!

In the end, we will be a country that defaulted, so our creditors lost a few pennies or maybe not. But look at the bright side; we will stop from being a bottom-less pit as someone posted. You people can keep your tax money and go on your lives being relieved that you no longer have to finance some greedy rebels. And then the rest of the EU will have to face the music for their huge debts. It's just a matter of time really.

So how does this idea sound to you then?

And I'm closing with courtjester said; Will our "dear leaders" have the guts to execute?

You are so to the point. I was trying to be kinder in my post. From their point of you they are right. Unfortunately most of the people in Europe do not have all the necessary information to judge. Don't forget that they also face problems in their own countries and are under the impression that a big part of their problems is our fault. That if we go down, they will go up. Moreover, the money their countries gave us are tax payers' money, not money of those who earn trillions from our situation. You know, tax payers, people like us. I suppose you as all of us know really well how it is to pay taxes. By the way, Gordon L, people who don't pay taxes here are mostly a group of rich people, most of us are not part of it. Lately many of them were arrested.
Dennis, we would think the same if we where in their shoes.
Moreover, just consider this: We could do all the things you mention above, BUT someone must DECIDE for them. I really don't think that people in charge are capable of handling the situation. In addittion, our mentality should change too. For example, you mention the benefit our land provides us in agriculture. I do believe myself that agriculture is the solution for us, but many of the land owners are indeed lazy - they got used of the EU money. People like them caused part of the problem we face today.
Personally, I believe that living or staying to the eurozone, will make no difference for us in the end.

Greeks start paying taxes as soon as tax evasion becomes impossible. There is a civic minded people for you. Gives you lots of confidence in Greek ability to see the big picture outcome of their everyday behaviour. The country is doomed.

Says who that we do not pay taxes? Did you hear it from the same people that informed the world that Sadam was preparing a nuclear or chemichal hit and now Tony Blair is being held accountable about this hoax? dailymail.co.uk/news/article-2020625/Iraq-inquiry-Tony-Blair-held-account-Chilcot-report-war.html

You fail to see the big politics involved here. Someone doesn't want to pay the bill, let's say someone who prints money and has flooded the entire planet with papers without any value and keeps on living on the burdens of the rest of us, and they're trying to avoid judgement day. And that my friend isn't my country. Someone who almost defaulted back in August and it was no big deal for anyone. Someone who started to tremble as soon as many key trade players started to make transcactions in euros as well, meaning that their companies would have to keep euro surpluses as well. Someone who doesn't want an independent Europe, the same goes for GB, since they're afraid of the Germans and to be honest they're right about that one.

But hey, a tiny country like ours which is around 2-3 of Europes GDP, is the one for everything going on right?

In my opinion, if my opinion matters anyway, what we need is to be realists, reconsider our needs, reconsider who we vote and don't start blaming the rest of Europe. As long as, they start paying more attention in understanding us, rather than blaming us.

I'm not sure they have graped the concept of 'paying taxes' so far. At least as far as they themselves are the ones who are supposed to pay taxes. Not the rest of the eurozone citicens (to continue to keep Greece afloat).

Propably, a group of "businessmen", who did business in our expense, did not pay taxes. Obvioulsy they are not the majority. I am sure you don't realy believe that 10 million people never paid taxes. In case this is true, I should be rich! Every house in my neighbourhood should have a pool or at least a jeep in their garage, even a garage! I am not rich, my neighbourhood is pretty ordinary.
By the way, the majority of us do not have a fortune to be taxed for.
It seems from what I red in the comments of this topic that EU want Greece to take action and punish the businessmen I mention above, as much as Greeks do.
Stop beeing prejudiced against Greeks.
I truly hope that the rest of the european countries are as well-organized and transparent as their citizens think.

Well, you are right about being realists and caring about who we vote for. It'll be hard though to rehab an entire nation from the drug of political favors. It's happening all over the world but here it's exaggerated because it's a part of the colonial policy of the stronger countries. They give everything to the country's elite they're interested in and then they use politicians and bureaucrats to sustain the favorable to them status quo. Try reading John Perkins' "Confessions of an Economic Hit Man".

But what you fail to understand is that they do not seem to have the best of intentions about us not now and not in the past. History has a lot to teach us about that one. Try reading the Patsifiko case and GB did back then.

You don't earn respect and understanding by hoping for their best intentions. You fight for it and earn it every single.

Dennis Foreigner:
"No need for food imports then. Hey, look at that we're still alive and kicking! They only thing we have to do is work on that since our farmers where transformed to people who stay in pubs all day long waiting for the EU money to come."

Why do I think that it will not be you to work hard in the fields to produce a sound feta, grapes and olive diet or work productively in a factory producing the first ever Greek automobile? Ask your parents, maybe they still remember the glory and wealth of old Greece in the 50ties or 60ties and good luck with your one million productive government employees.

Apparently you don't know anything about the 50's and 60's in Greece and you confuse the boom of the German economy with the doom of ours. In the 50s we tried to recover from the civil war and in the late 60s the generals took over power thanks to our atlantic friends. In the 70s thank God we got rid of the Dannish King you people had imposed on us, while before that we had a Bavarian king.

I don't have a problem working hard. As a Greek I'm already working harder than you, a German, and that's according to Eurostat. I suppose Eurostat doesn't lie like the Greek statistcs do. But my friend I will not sell my products to the German importers for pennies so that they can sell them in fancy packages and charge the premium they want and make a fortune. And that premium is the actual value of our products but you want to buy them cheap and sell them sky high.

You are used to work less and get paid more. Here, on the contrary of what the media is trying to brainwash you, we work more and we get paid less. And its the same media that lied to everyone about the war in Iraq for example. So before you actually accept information as valid, you have to think who is selling that to you and what they want to make out of it. Two basic principals that my american statistics tutor taught me in college.

So what we need to do is follow the Italians. The Itaians have set up their own distribution channels so that they are the ones that charge the premium on the product and they make lots of money, like in olive oil. And then we will start getting money back into the country. Your money. Trust me it's doable I know first hand.

As far as the goverment employess are concerned, you should have used the adjective unproductive and not productive because that's what they really are. And as a friend told me yesterday, since they haven't worked at all all these years, we should have them cultivate the state land instead of firing them. That way they will be productive and make up for all the years of doing nothing. The young ones will do that while the older ones can do the paper work.

There were greek automobiles my friend but guess what, the importers of german cars, italian cars, english cars did their best and actually managed to close down those factories.

In conclusion, I will work hard but I will get paid and earn as much as you do. I suppose that is fair enough.

Let's tell the story "wie es wirklich ist." Greece has numerous well-paid but do-nothing bureaucrats. The EU has numerous well-paid but hard-working bureaucrats; these bureaucrats churn out prodigious volumes of onerous and intrusive regulations. So who is happier, cheating Greeks or hard-working and oppressed northern Europeans?

All of which is beside the point. The problem at this moment is the fate of Greece. If the US and the EU need to purge the useless paper-pushers of Washington and Brussels, curb the wayward banks and solve their pressing problems, this does not justify Greek misconduct, Greek government maladministration, or any of the Greek problems that place Greece in imminent danger.

Greece has caused and will continue to cause the same problems for the rest of the EU because the Greek culture is incompatible with that of the majority culture of the EU. Unlike other countries that have brought their cultures into alignment, the Greeks have lied, evaded and, in the end, refused to change.

To be fair, it is not all Greeks, and the consequences will impact the innocent as well as the guilty. But far more innocent non-Greeks are suffering because of the guilty Greeks, than the number of innocent Greeks who will suffer if Greek intransigence is rewarded with expulsion from the EZ and/or EU.

Truth to tell, and some of the anguished replies sometimes get close to this, EZ/EU membership has been as bad [or worse] for Greece than for her angry partners. If a marriage starts bad and then goes to hell, do you carry on or get a divorce? It is better to get it done as early and as peacefully as possible, for otherwise it only will get worse.

Maybe we do not belong in europe in terms of culture or maybe we do. I think we are close enough and certainly closer than our eastern neighbours.

EU bureaucrats have given amnesty to the guilty Greeks. They should have investigated every single transcaction, every single fund given to us and bring them to justice. Instead they prefered to follow the safe path of accusing everyone of being like the guilty ones either because they actually felt that way, or because they simply didn't care, or even worse because some european companies had a lot to gain from those contracts as happened in the Siemens scandal.

What is most outragous is that the EU bureaucrats accepted the guilty Greeks as their negotiaton partners. How can you negotiate for the future of the country, especially at this critical period, with the very same people who are accountable for this epic failure? Unless you have something to gain for yourself as well.

Money spent.Money lent.
As we all knows Greece is now paying for a decade of excess spending since joining the Euro
The question is just who is going to pay for the party?
The spenders, the lenders, or both?

If the lenders should join is it then be private lenders only (current argument), or should also Eurozone, ECB, EU, IMF and others pay for helping out with the lending?

Choosing the wrong solution could have dear consequences for all other Eurozone countries in regards to sovereign debt yield rates due to increased risk and yield. That is why they cannot make up their mind.

The Germans have a point though. Don't spend more than you earn, but I guess it is bait late for that to solve current problem.

I wonder how much longer it will take for people to realize that one could forgive Greece 100% of her sovereign debt and the country would still be in trouble! Ignore the budget deficit, if you will. Just consider that, in 2011, Greece still had an external deficit of over 20 BN EUR (current account) and the Greek banking sector lost 36 BN EUR in deposits in the first 11 months of that year.

That’s a cool 56+ BN EUR which Greece has required in new external funding during 2011. The current account deficit will not get much lower going forward and the capital flight may not, either.

What Greece needs is a long-term economic development plan which aims at reducing the current account deficit and attracting foreign investment while at the same time stopping capital flight!

As usual the comments are full of accusations that anglo saxon finance is behind Europes unfolding decade of economic catastrophe

Yet the buyers af debt in the world are the surplus countries. Last time I looked Anglo Saxons are deficit countries. All our financial wizards can do is speculate on what the people with the money, Germans, Chinese, oil producers etc will do with it.

Until this infantile retreat into fairy stories about "someone else is to blame" are publicly ridiculed for the drivel they are there will be no improvement

Europe has, by creating the economically illiterate Euro (take not "Economist", illiterate), finessed an economic disaster from a global economic storm. Without the Euro what would have happened? Since 1998 there would have been:

1. No boom in Southern Europe and no rise of per capita GDP closer to Northern levels
2. High and rising borrowing costs as trade and competitiveness diverged
3. Lower govt expenditure
4. Falling FX rates

And thus today we would see a recovery in progress after a recession shared with the world in which austerity and devaluation along with some default and IMF support would do what it has done everyone else, started recovery.

The sad and frankly pathetic truth is that from their vainglorious ignorance Europeans have inflicted all the pain that will now follow for a decade on themselves. In doing it they have, are, and look set to continue to destroy what little European demos there was and create the very thing they claimed to want to avoid, nationalism, protectionism, hatred and conflict.

Stupid is as stupid does. Creative destruction time. What a tragedy. Surely we should be burning the witches who did this to us? Now, we all know who promoted this catastrophic Euro. We all know who warned against it - the true Europeans, the ones who have been abused and rubbished for a decade by people who turn out to be cretins.

I presume you were against the euro project from the outset and have an axe to grind. Well the milk has been spilt and you're still crying. It's wonderful that you have the benefit of perfect hindsight regarding the euro project, unfortunately you are painting a wonderful counter-factual narrative of the promised land that we might have been lucky enough to live in had your static vision been followed in the first place.

I should declare here that I am, and always have been, a British euro-sceptic, but I do not share your revolutionary fervour to purge Europe of its supranational elites. Whats done is done, look for solutions not blame.

Since the all-mighty Troika set foot, wages dropped 30% (that you call "slight"), taxes quadrupled, private cash reserves in banks dropped by 60 billion euro, the economy is in the deepest recession in modern history and the greek stock-market worths a 1/10th of domestic GDP.

Troika's sole mission is to secure the lenders' interest; that is why no-one proposes any measure to increase competitiveness and improve efficiency.

Where exactly did you also read in the Euro constitution that a bond default equals to an exodus from the euro.

Greece is just the tip of the iceberg. Torching us on you medieval fires will not flush away your sins. Sooner than expected the West will face a true financial catastrophe. Supporting the above is not a repudiation of a liberal perspective in favor of 'state capitalism'. The opposite.

Since the all-mighty Troika set foot, wages dropped 30% (that you call "slight"), taxes quadrupled, private cash reserves in banks dropped by 60 billion euro, the economy is in the deepest recession in modern history and the greek stock-market worths a 1/10th of domestic GDP.

a. Taxes quadrupled - from a time when you didn't pay any taxes (clever idea)
b. Deepest recession in modern history - you cook the books: more likely your economy has finally hit its true value (no thanks to Goldman Sachs).
c. private cash reserves in banks dropped by 60 billion euro - we all know that Greeks are stashing all their ill-gotten gains (now going overseas).

The Greek government is rich - sitting on billions of assets!!
It's time start selling and disclosing these assets - or it's time to part our ways. I wish I could say the experience was worth while.

If you talk about the black market, neither Italy or Germany or any nation is far greek standards. Germany's is close to 20%, Italy's the same. The employees and the pensioners pay enormous amount of tax. In which western nation someone with 5000 euro income pays 10% tax.

Regarding cooking books I agree but you also need to agree that when Germany or France exceeded the deficit standard everyone was looking the other direction. When Ireland was borrowing 1000% of their GDP every one was happy. Greece is less than 2% of the european economy and holds less that 1/1000th of global debt. Suddenly we are the scape goat.
When Greece surrendered it's industry and when Greece was forced to buy milk and meat from Germany or France due to the GAP agreement the northerners were happy.

Before you accuse so blatantly a nation, you better see the reasons why we reached this point. Spending every year 8% of GDP in defense against Turkey, buying all these weapons from Merkozy and USA was never a problem. Today 1/4 of the greek schools are forced to close down.

But of course, for the outsiders it is Greece's fault. It's noone else's. Troika is ruling greek economy for 2 years and we reached rock bottom. Hooray!

What's with this attitude? And this threatening tone? Your troubles are due to economic mismangement in your country, from which everybody down there was cutting some slack. Well, almost everybody. It was all going quite well for you as the whole of the EU and the West were doing ok in pre-Lehman times. But this roziness was hiding a decay down there. Once the crisis started to spread, your misdeeds would eventually come out in the open, because from that point on one member's mistake meant losses and damages for the lot.

So don't go around putting the blame on the others. Accept your guilt and work your butt off to turn the situation around. And act fast! Time's running out